Anime Sales Hit Records in Japan While Studio Costs Climb Even Faster 

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Japan's anime market has continued to set records, with the industry as a whole valued at ¥3.84 trillion ($24 billion) in 2024, and overseas revenue accounting for 57% of that total. But that growth has not translated into relief for the studios actually making the shows, says Tadashi Sudo, a journalist who has covered the anime business for two decades.

Speaking with Japan Forward, Sudo explained how rising revenue and rising costs have moved almost in lockstep, why hit anime are pulling the industry apart rather than lifting it evenly, and why the labor market inside studios is splitting into two distinct tiers.

Higher Revenue, Higher Costs

Sudo said production company sales have genuinely grown, a trend visible in figures from the Association of Japanese Animations. But higher sales have not eased pressure on studios, with production costs climbing just as fast as revenue.

"Just because sales are going up doesn't mean production companies are having an easier time. That's a completely different story," he said.

Labor is the biggest driver. Wages for animators, directors, and production staff, long criticized as too low, have risen sharply in recent years, a shift Sudo called good for workers but costly for studios.

Budgets have grown, but staffing levels per title have swelled alongside them. A show once made with 200 people might now need 300. "Even if the budget doubles, that doesn't mean each staff member's pay doubles too," he said.

Non-labor costs have climbed as well: Tokyo office rents, electricity, and software licensing, including steep price increases for tools like Adobe's suite. "When you add all of that up, overall costs have risen so much that wage growth hasn't kept pace with how much the market has expanded," Sudo said. 

The result, in his view, is that more production companies are slipping into the red even as the market as a whole sets records.

A Widening Gap Between Hits and Everyone Else

Sudo pointed to blockbusters like the Demon Slayer film franchise, whose latest installment topped ¥97 billion ($600 million) in worldwide box office, as an example of how success at that scale changes everything for a studio. Ufotable, the studio behind the franchise, restructured and converted its roughly 200 staff members to full-time employment and raised bonuses. It has since expanded into cafes and its own movie theater as side businesses. 

Major companies like Ufotable, Studio Chizu, and Toei Animation, on their respective hit franchises, can pay well and offer strong working conditions because, as he put it, "they're making a lot of money."

But that success is concentrated in a small number of titles. "The titles that actually hit are a small minority," Sudo said. 

For the larger number of studios producing shows that do not break out, the anime boom itself has done little to change their situation, and rising production volumes have, if anything, intensified competition for work, leaving conditions "just as tough as ever."

He described a similar divide in financing. The production committee model, where companies pool investment and share rights, is still how most anime financing works, and Sudo doesn't expect that to change. 

But only a handful of companies, he named Cyber Agent, Bandai Namco, and Aniplex among them, have the capital to fund committees themselves and the in-house expertise to negotiate directly with platforms like Netflix, Amazon, or Disney. "Those companies can put up their own money, produce on their own terms, and manage the rights themselves. That's exactly the group that's getting bigger and more profitable," he said. 

Most other studios remain locked into fixed-fee contract work, unable to capture the upside when a title succeeds, and Sudo said the divide between the two groups "is getting pretty extreme."

A Workforce Splitting Into Two

On labor conditions, Sudo was skeptical that international pressure, including criticism from the UN Human Rights Council over labor practices in the industry, has been the main driver of change. 

"I don't think outside pressure itself is having that much of an effect," he said, arguing the shift has come from within the industry, as executives and production committee investors alike recognized years ago that the old model was unsustainable. 

He said conditions on the ground have improved substantially, particularly at listed companies now bound by strict compliance requirements, but that improvement "hasn't fully gotten through" to public perception.

The bigger issue, he explained, is a growing split within the workforce, not just between companies. Staff animators at major studios, such as Toei Animation or Bandai Namco-affiliated companies, increasingly enjoy solid pay and conditions. Freelancers doing comparable work, often without formal contracts, do not. A 2023 survey by the Japan Animation Creators Association found that freelance and self-employed animators and directors accounted for 47%. 

"People drawing the same pictures, working roughly the same hours, are ending up split between well-paid animators and animators stuck in the old, harsh working conditions," he said, calling recent scrutiny from Japan's Fair Trade Commission into freelance contracting practices a meaningful but still insufficient step.

Sudo pushed back on the idea that Japan risks losing its edge to cheaper overseas labor. "I think the era of outsourcing overseas just because it's cheap is already over," he said, noting that wages in South Korea, China, Thailand, and Vietnam have risen enough to erase much of the cost gap. Studios now go overseas because they need more hands and specific talent, not cheaper ones. 

If anything, he said, competing for skilled animators abroad, many of whom are drawn to Japan precisely because they want to work on Japanese-style 2D animation, will put upward pressure on wages at home rather than undercutting them.

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Author: Daniel Manning

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